We have examined the interaction between 4',6-diamidino-2-phenylindole (DAPI) and DNA using flow linear dichroism (LD), circular dichroism (CD), and fluorescence techniques. We show the presence of two spectroscopically distinct binding sites at low binding ratios with saturation values of 0.025 and 0.17, respectively. In both sites DAPI is bound with its long axis approximately parallel to the grooves of the DNA helix. Resolution of CD spectra shows that an exciton component is present at higher binding ratios, which we attribute to the interaction of two accidentally close-lying DAPI molecules. We also find evidence that DAPI, at least in the high-affinity site, binds preferentially to AT-rich regions. From the spectroscopic results, supported by structural considerations, we can completely exclude that DAPI is bound to DNA by intercalation. Binding geometries and site densities are consistent with a location of DAPI in the grooves of DNA, with the high-affinity site most probably in the minor groove.